A B.C. company has filed for bankruptcy in the United States.
Known for creating engineered wood products, also known as mass timber, Structurlam of Penticton announced on Monday that it had entered into a purchase agreement to sell all of its assets in B.C. and Arkansas for US$60 million.
Mass timber is wood that’s been glued or laminated together, then digitally cut out in various shapes, sizes and lengths. Those custom pieces are then shipped and precisely assembled on-site.
The deal, known as a stalking horse asset purchase agreement, is with Mercer International of Vancouver.
“In conjunction with the (asset purchase agreement), the company has voluntarily filed petition for relief under Chapter 11 of the U.S. code,” reads a company press release.
“Recognition of the Chapter 11 proceedings will be sought in the Supreme Court of British Columbia shortly thereafter.”
This week’s release noted that the deal is subject to higher and better offers, part of the court-monitored auction process.
“I am delighted and grateful for Mercer’s vote of confidence in Structurlam and in its leadership in the mass timber industry,” said Structurlam CEO Matthew Karmel.
“It is especially rewarding given the difficult period the company has had since suspending its operations in Arkansas mid-January, and it will help in normalizing the plant operations going forward.”
In January, Walmart cancelled an exclusive contract it had with Structurlam. The contract was for Walmart’s new, massive headquarters in Bentonville, Ark.
Structurlam has a transformed steel plant in Conway, Ark., worth an estimated $90 million, and the company suspended operations at the plan on Jan. 18 and laid off 144 workers.
The company — which was founded in 1962 — said Walmart was the plant’s only customer.
One report, from Arkansas Business, said Walmart’s massive order proved to be too much for the new plant, resulting in production issues.
“Decisions like this are never easy, especially when they impact our people,” Karmel said at the time.
The company bills itself as the leading North American provider of innovative and cost-effective glue-laminated mass timber solutions for the construction and industrial markets in Canada and the U.S.
It has three manufacturing locations in B.C.: Penticton and Okanagan Falls.
The provincial government, which allows mass-timber buildings up to 12 storeys, has lauded Structurlam in the past.
The company was also involved in building a hybrid mass-timber building at UBC in 2017 that reached 18 storeys. The $51-million building, Brock Commons, can house 404 university students.
In 2013, the province’s forest minister, Steve Thomson, called Structurlam “a world-class manufacturer and technological innovator.”
“Their leading-edge products and manufacturing processes are changing the way the world thinks about building with wood, while helping ensure long-term employment for Okanagan workers and their families,” Thomson said.
Global News has reached out to Structurlam and Mercer International for comment.
Mercer has a pulp mill in Castlegar and a small forestry operation in Lumby, but has around 4,500 to 5,000 employees across the globe, mainly in Germany.
In B.C., it employs around 500 people. It also has a mass-timber operation in Spokane, Wash., that employs around 60 people.
Mercer told Global News that Structurlam’s product line is quite similar to what it’s developing, and that Structurlam’s synergies and elements are consistent with its own.
It also called mass-timber a growing market, saying it’s quite popular in Europe.
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